LONDON -- Centrica (ISE: CNA.L) today announced it was buying two U.S. energy retailers for a combined total of 71 million pounds. This will bring the company another 245,000 residential and small commercial customer accounts in New York State and Pennsylvania, which will add to the million accounts Centrica already has in the U.S. Northeast.
The acquisitions follow three similar bolt-on deals announced last year (two of which were also in the Northeast), which brought in a total of 750,000 accounts. The two companies being acquired today, Energetix and NYSEG Solutions, are currently owned by the Spanish energy giant Iberdrola (OTC: IBDRY.PK), best known in the U.K. for being the parent company of Scottish Power.
Centrica has certainly been more aggressive on the acquisition front recently than other FTSE 100 utilities, such as Scottish and Southern Energy and United Utilities. For example, it has also been sucking up various North Sea assets.
Last year, around 13% of Centrica's profits and more than 6 billion pounds of its revenues came from its U.S. operations, where its retail business trades as Direct Energy. At 312 million pounds, operating profits for North America were up a third on the previous year, putting the U.K. business in the shade. Profit growth is likely to be more sedate this year, as the U.S. has been experiencing a hot summer (so that's where all our sun has gone).
Chris Weston, CEO of Direct Energy, said in respect of today's deal: "This acquisition marks another step in the development of our North American business and supports Direct Energy's strategy to grow and add scale to its US Northeast downstream power and gas position, particularly in the New York market."
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